Credit scam: 7 elements to avoid fraud
How can you be sure that a personal loan offered by a broker does not conceal a scam? The dynamic credit market, combined with the difficulties of certain individuals, unfortunately encourages certain frauds on the part of unscrupulous brokers. It is therefore strongly recommended to carry out preliminary checks before committing, to ensure that the broker is trusted and that the solutions proposed are sound.
1. Copy of contract
It is very important that the broker gives the client a copy of the contract. It is a mandatory document of which you must always have an original copy, signed by each of the parties.
2. Application fees
The financial institution with which the credit is taken out remunerates the broker by granting him part of the gain. In fact, the borrower should not pay any fees through a broker, since these fees are included in the rate of credit. It is also one of the advantages of going through a broker: this simplifies the readability of the offers, which thus become easier to compare.
3. Right of revocation
For the consumer, this is the possibility of withdrawing after having signed the contract. This solution protects consumers who sign a little too quickly, without fully considering all the consequences of their commitment, or who would have been somewhat in a hurry to sign.
Your contract must mention, the conditions of revocation, and the consumer must be informed. To date, the consumer’s right of withdrawal is applicable for 14 days following the signature.
It is advisable to systematically verify the presence of this right of revocation on the contract.
4. Early repayment
Consumers often wish to repay their credit before its maturity. This operation is possible for a fee of one hundred francs. This is the early repayment. This point is governed by article 17 of the LCC law on early redemption which came into force on January 1, 2003. A good broker must systematically enlighten you on the conditions of early redemption.
5. The interest rate and the repayment period
These are the basic characteristics of a loan. This information must be clearly specified in the contract. In case of doubt or ambiguity, do not hesitate to approach a specialist to ensure credit conditions.
6. Compulsory and optional insurance
These insurances cover certain risks, for example, in the event of the death of the borrower. Only death insurance is compulsory, and its cost must be included in the interest rate offered.
The other insurances are therefore optional. If you decide to give it up, make sure you can continue to honor your commitment if the risk arises. For example, in the case of unemployment insurance, check that you are still able to repay the credit with a drop in income of 30%.
7. Work with an accredited broker
Accreditation is an excellent guarantee of confidence. Good brokers are accredited by banks, however, there is unfortunately no list. It sometimes happens that ill-intentioned brokers pretend to be wrongly accredited by a bank.The verification of this point is simple and quick: a phone call to the bank concerned is enough! This will prevent you from falling into the arms of an indelicate broker.
The advantages of going through a broker
The first advantage is undeniably the possibility to access the products of several banks at a glance, and thus to be able to choose the solution most appropriate to your needs. The broker can also quickly verify that your profile matches the prospective bank, ensuring that you meet the bank’s requirements. It is a very significant time saver.
The role of a broker is naturally to obtain the most advantageous conditions, in particular on the rate of credit. Due to its network and the number of loans taken out, the broker has significant influence with the banks, from which he makes his clients profit.
In this case, the broker analyzes your situation in detail, and thanks to a large catalog of available products, he can offer very well adapted solutions, almost tailor-made. He also takes care of the administrative costs, saving you from numerous administrative procedures.